Mortgage rates coast as housing market tightens

Mortgage rates moved up, down and sideways this week as investors pondered both positive and negative economic news reports.

30 year fixed rate mortgage – 3 month trend

Rate movement was so slight it was almost nonexistent. The benchmark 30-year fixed-rate mortgage fell to 3.61 percent from 3.62 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.44 discount and origination points. One year ago, the mortgage index stood at 4.33 percent; four weeks ago, it was 3.55 percent.

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Buying a Home 44% Cheaper than Renting Despite Rising Home Prices
Low mortgage rates have kept homeownership less expensive than renting in all 100 large metros

Even though asking home prices rose 7.0% in the last year, outpacing rent increases of 3.2%, the gap between buying and renting has narrowed only slightly. One year ago, buying was 46% cheaper than renting. Today’s it’s 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because falling mortgage rates have kept buying almost as affordable, relative to renting, as it was last year. According to Freddie Mac, between February 2012 and February 2013 the 30-year fixed rate dropped from 3.9% to 3.5%, though rates have been rising in March.